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Health reform bill includes tax credits to help middle and lower income people buy insurance

This promise gets at one of the most expensive and controversial provisions in the health care reform bill passed by Congress and signed into law by President Barack Obama on March 23, 2010. The plan includes government subsidies through tax credits to middle and lower income people who do not get their health insurance through an employer -- just as Obama proposed during the election.

You can read all the details about how it would work in a section of the bill titled "Affordable Coverage Choices for All Americans -- Premium Tax Credits and Cost Sharing Reductions," which begins on Page 237.

The subsidies will take effect in 2014 and are available to Americans who buy insurance on the exchange, which will be virtual marketplaces for health plans. The exchanges are designed to serve people who do not already have insurance through their employer and who are not covered by a government program such as Medicare or Medicaid.

Medicaid will be expanded to everyone with an income up to 133 percent of the federal poverty level. Cost sharing tax credits will then be offered on an income-based sliding scale for people making between 133 percent and 400 percent of the poverty level.

At the upper end of the range of those who qualify for premium subsidies -- those earning 300 percent to 400 percent of poverty level -- the government will pay whatever amount of the premium that exceeds 9.5 percent of the beneficiary's income.

Officially, the federal poverty limit for a family of four is $22,050, and 400 percent of that amount would be $88,200. That means that many people earning the subsidies will actually earn more than the median income for married couple families -- $73,010.

The nonpartisan Kaiser Family Foundation has a handy Health Reform Subsidy Calculator that allows you to figure out how much, if any, federal subsidy (through tax credits) you'd qualify for based on your income and family status.

The government's nonpartisan Congressional Budget Office estimated the cost of subsidizing health insurance expenses for qualified people in the exchange will cost $464 billion over the next 10 years.

Again, the tax credits wouldn't kick in until 2014, the same year the health care exchanges would begin. Republicans have vowed to try to repeal the health care bill before then, but unless or until that happens, the bill signed by President Obama is the law. And we rate this one Promise Kept.

Health reform bill has tax credits for health insurance

After months of talking about health care reform, the U.S. House of Representatives introduced major legislation to overhaul the nation's health care system. House Democrats unveiled the 1,000-plus-page bill, called America's Affordable Health Choices Act of 2009, on July 14, and it includes most of President Barack Obama's key proposals on health reform.

One of Obama's promises was to give tax credits to those who need help to pay their premiums. The House bill includes those credits for people who make up to 400 percent of the federal poverty level (about $43,000 for an individual or $88,000 for a family of four) and buy insurance through the new national health insurance exchange.

People who can buy affordable health insurance through work will not get credits, nor will people who are in the United States illegally, according to the House bill.

To be sure, there's a long way to go — maybe months — before the bill becomes law. It has to pass the House and get through the Senate, where many changes could be made.

Nevertheless, the bill marks significant, measurable progress on Obama's promise, and we rate it In the Works.